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Thursday, 23 March 1961

Mr WILSON (Sturt) .- After the feast of words we have had from the member for Grayndler (Mr. Daly), perhaps it would be of interest to the House to know the purpose of the bill before us. Its purpose is to reduce the sales tax on motor vehicles and motor cycles; and it has my whole-hearted support. Last November the Treasurer (Mr. Harold Holt) announced in this House that the Government proposed to take certain action to reduce the purchasing power in the community for the purpose of preventing what otherwise would have been a most serious calamity. Australia has been through eleven of the most prosperous years in its history, and probably the year 1960 was the most prosperous of all of them. As so often happens in a year of great prosperity, the spending of the people completely outstripped the capital savings of the community. As a result of that, interest rates rose alarmingly. The demand for capital and savings was so great", and the competition between various industries desiring the scarce capital was such that there was a tendency for savings and capital to be transferred from our essential industries into the non-essential and less essential industries. At the same time it became apparent that the motor car industry was producing at a rate far in excess of that which Australia could absorb. Consequently, there was an acute shortage of steel and other commodities, with the result that the steel which should have been used for our essential industries and which should have been exported to build up our export credits was used to an undue extent in the motor car industry. Imports of steel during 1960 compared with those in preceding years increased by 1,000 per cent., due, in no small measure, to the excessive production of motor vehicles.

Any government having in mind the need to maintain stability within Australia and to prevent a bust had to take action. During 1960, we spent in Australia 22s. for every 20s. that we earned, and spent overseas £500,000,000 more than we earned overseas. Faced with those circumstances is there any one in Australia who suggests that it was not necessary for some action to be taken? If there is, that person just does not understand the basic and essential principles of economics.

I was pleased to hear the honorable member for Melbourne Ports (Mr. Crean), speaking on behalf of the Labour Party, agree that action was necessary last November. However, he suggested that the Government should have relied upon the credit squeeze alone and should not have taken action in relation to the excessive use of steel, savings and capital in the motor industry.

Mr Crean - I did not say quite that.

Mr WILSON - I think that if the honorable member looks at his speech he will see that he did say that.

Mr Crean - You should listen a little more carefully.

Mr WILSON - I took down the statement as the honorable member made it, and I had the honour of hearing every word that he said. I think it is agreed on all sides that action had to be taken last November.

When introducing the legislation dealing with this matter the Treasurer (Mr. Harold

Holt) stated in the clearest and most definite terms that the increased sales tax would be of a temporary nature and would remain in operation only so long as was necessary to bring the utilization of capital and steel into line with what was a fair proportion to be used by the motor car industry, and that it would then be removed. Honorable members of the Labour Party laughed at him. Almost with one voice one Labour man after another virtually stated: " Do not take any notice of what the Treasurer said. Do not believe him. This tax will remain for ever." Now that the Treasurer has kept his promise and the Government has reduced the tax as soon as it was possible to do so, the Labour members who have been through their electorates telling their friends to buy motor cars in defiance of Government policy are now squealing because their electors are saying to them, " What rotten advice you gave us ". It is apparent that the Labour Party to-day is the friend of those people who bought expensive motor cars in defiance of the Government's wishes, and now is asking the Government to refund to those wealthy people, the increased sales tax that was included in the cost of the motor cars that they purchased.

I am amazed that Labour members and others have had the audacity to describe the Government's action now as a change of policy. What possible change can there be when in every respect it is in accordance with Government policy and with the announcement that the Treasurer made in this House? He stated that the tax would be temporary; it was temporary. We are extremely pleased to note that the Government's action was so successful and worked so quickly that it brought the production of motor cars into line with Australia's absorptive capacity. Now that this has been done, we are pleased to have before us this bill which reduces the tax to the former figure.

I want to deal now with one or two points that were made in the thoughtful speech of the honorable member for Melbourne Ports. Although I disagree most violently with him on an approach to political matters. I always credit him with giving to this House a well-reasoned speech according to his political point of view. As I said earlier, the honorable member agreed that the Government was duty bound to take some action last November. As 1 understand it, he suggested that the Government should have imposed the credit squeeze and, I assume, should have relied upon the credit squeeze to rectify this maladjustment in the motor industry. I believe that the credit squeeze alone would not have achieved the desired result. An excessive amount of capital, savings and steel was being used by this industry and direct action had to be taken.

The honorable member also stated that the Government's objective could have been achieved by restricting the importation of petrol. There again we see the Labour approach to this problem. We remember petrol rationing when Labour was last in office and we remember the coupons, the graft and the scheming that went on when people were trying to get more than their fair share of petrol ration tickets. We know that that is the kind of legislation which Labour would introduce immediately after coming into power again. It was interesting to hear the honorable member refer to a 1957 magazine and tell the House that we could have achieved the desired objective by restricting the importation of petrol which, of necessity, would have entailed petrol rationing in Australia. All I can say, Mr. Speaker, is that I do not think members of my party will ever agree to petrol rationing again, and I will not.

We heard from the honorable member for Melbourne Ports something that we did not hear from any other member of the Labour Party. We heard from him, first, an admission that something had to be done and, secondly, some suggestions of the way he or the Labour Party would have done it. Last November the Labour Party would have introduced petrol rationing. I ask honorable members and the people of Australia which they prefer - petrol rationing as we had it under Labour, or these temporary measures which quickly bring about the desired results.

Several honorable members opposite have mentioned what they refer to as " the thousands of dismissals" that have taken place. That retrenchments have taken place is admitted on all sides; but I remind honorable members that last month the Commonwealth Employment Service placed 40,000 people in employment. What has actually happened is that people have been retrenched from non-essential industries and have now gone into essential industries, such as the steel industry, to increase our export income and to produce steel which is an essential requirement of Australian industry.

The policy of this Government is full employment. The Government has successfully maintained a policy of full employment for eleven years and it will continue to maintain such a policy. The Government introduced its economic measures last November, but the employment figures that were produced up to the end of February still showed a very high level of employment - one of the highest in the world. The figures also showed that a very large number of people who had been retrenched by the motor car and some other industries had been absorbed into other industries very quickly.

The Government is determined to maintain its policy of full employment and it will change the emphasis of its economic actions almost from day to day in order to maintain full employment. Unemployment probably has developed more in my own State of South Australia than in any other State as a result of the dismissal by General Motors-Holden's Limited of about 1,600 people in one day without giving the Commonwealth Employment Service an opportunity or a reasonable time within which to re-employ them. The Government is watching the position very closely. The people of Australia can rest assured that if unemployment develops in any State appropriate action will be taken to ensure that those people are re-employed in other industries. If you intend to maintain a policy of full employment, obviously you have to change the emphasis of the policy from time to time. Sometimes you have to inject additional money into the community; at other times you have to withdraw surplus purchasing power from the community. The policy of this Government, being a policy of full employment, will necessitate action of that nature being taken from time to time.

Of course, if to-morrow the Government decides to inject additional money into the community, the Labour Party will say, " The Government has changed its policy again". That is not a change of policy.

Our policy is clearly stated in the objectives of the Liberal Party of Australia, lt is set out in clear and unmistakable terms that the policy of our party is the maintenance of full employment, a stable currency, a high rate of development and a high rate of immigration. Those are out four guiding principles, and in order to maintain those four objectives the Government will have to change the credit policy from time to time. I would not be a bit surprised if, in a fortnight or three weeks' time, credit were deliberately made easier than it is at the moment. It may be necessary to take that action.

Mr Cairns - A little bit longer than three weeks.

Mr WILSON - It may be longer; I do not know.

Mr Cairns - The Government will have to get it a bit closer to the election than that.

Mr WILSON - I have sufficient confidence in the Government, the responsible officers of the Treasury and the advisers of the Government to say that they will watch the position from day to day and if in the interests of Australia credit should be expanded they will expand it, or if in the interests of Australia credit should be restricted they will restrict it. That is not a change of policy; it is the implementation of the policy of maintaining development, a progressive economy and full employment.

The honorable member for Grayndler (Mr. Daly) made one of his humorous speeches, far from the truth and not very relevant to the bill before the House. We expect speeches of that kind from him. They are always amusing. The audience in the gallery and some of the people listening over the air probably enjoyed it, but I do not think that speeches of that nature delivered in this House add anything to the dignity of Her Majesty's Australian Parliament. A serious bill is before the House. It is a bill that concerns the lives of many thousands of Australian people, and I believe that we should deal with it factually and on its merits. I wholeheartedly support the bill. I say that it is in accordance with the promise made by the Government, and T am proud to see the Government which I support honouring its promise so quickly.

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